Fuel Oil News

Fuel Oil News January 2015

The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding

Issue link: http://read.dmtmag.com/i/443276

Contents of this Issue

Navigation

Page 11 of 51

Fuels eIA N e w s 12 JANUARY 2015 | FUEL OIL NEWS | www.fueloilnews.com editor and product manager for global energy management specialist, Schneider Electric. His short-term market outlook indicates that the futures contracts for crude and its byprod- ucts gasoline, diesel and heating oil will find a bottom at key long-term support price points through the remainder of 2014 and into early 2015. Early year forecasts for global oil demand are repeatedly being downgraded, due to slowing economies in the EU and China. U.S. demand also is under pressure from structural changes like an aging population, new driving behavior by the millennial generation and more efficient vehicles. U.S. crude oil production is now at a 28 year high, with supplies in the Middle East also continuing to climb. With this supply glut, global oil prices are under continuing downward pressure. Milne predicts that prices will hold, with strong seasonal demand being offset by growing supply and limited expansion in the world economy. eIA: short-Term energy Outlook, Dec. 9, 2014 Highlights • North Sea Brent crude oil spot pric- es fell by more than 15% in November, declining from $85/barrel on Nov. 3 to $72/bbl on Nov. 28. Monthly average Brent crude oil prices have declined 29% from their 2014 high of $112/ bbl in June to an average of $79/bbl in November, the lowest monthly average since September 2010. The November price decline reflects continued growth in U.S. tight oil production along with weakening outlooks for the glob- al economy and oil demand growth. The Organization of the Petroleum Exporting Countries' decision in late November to maintain its current crude oil production target, despite lower oil prices, put additional downward pres- sure on price expectations. • The current values of futures and options contracts suggest high uncer- tainty in the price outlook (Market Prices and Uncertainty Report). WTI futures contracts for March 2015 deliv- ery, traded during the five-day period ending Dec. 4, averaged $67/bbl. Implied volatility averaged 32%, establishing the lower and upper limits of the 95% con- fidence interval for the market's expec- tations of monthly average WTI prices in March 2015 at $51/bbl and $89/bbl, respectively. Last year at this time, WTI for March 2014 delivery averaged $96/ bbl and implied volatility averaged 19%. The corresponding lower and upper limits of the 95% confidence interval were $82/bbl and $112/bbl. • Total U.S. crude oil production averaged an estimated 9.0 million bar- rels per day in November. Projected total crude oil production averages 9.3 million bbl/d in 2015, a reduction of 0.1 million bbl/d from last month's STEO. • Driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.78/gallon on Dec. 1, the lowest since October 4, 2010. U.S. regular gasoline retail pric- es are projected to continue declin- ing for the remainder of the year, averaging $2.61/gal in December. EIA expects U.S. regular gasoline retail prices, which averaged $3.51/gal in 2013, to average $3.37/gal in 2014 and $2.60/gal in 2015. Forecast retail gaso- line prices for 2015 are $0.35/gal lower than in last month's STEO. • U.S. population-weighted heating degree days were an estimated 18% higher than the previous 10-year aver- age for November. Despite a cold start to the winter, lower fuel prices and the National Oceanic and Atmospheric Driven largely by falling crude oil prices, U.S. weekly regular gasoline retail prices averaged $2.78/ gallon on Dec. 1, the lowest since Oct. 4, 2010

Articles in this issue

Links on this page

Archives of this issue

view archives of Fuel Oil News - Fuel Oil News January 2015